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§ 991.1504. Risk retention groups not chartered in this Commonwealth

Purdon's Pennsylvania Statutes and Consolidated StatutesTitle 40 P.S. Insurance

Purdon's Pennsylvania Statutes and Consolidated Statutes
Title 40 P.S. Insurance (Refs & Annos)
Chapter 2. Insurance Companies (Refs & Annos)
Article XV. Risk Retention
40 P.S. § 991.1504
§ 991.1504. Risk retention groups not chartered in this Commonwealth
Currentness
(a) A risk retention group chartered and licensed in a state other than this Commonwealth and seeking to do business as a risk retention group in this Commonwealth shall comply with the laws of this Commonwealth, as provided in this section.
(b) Before doing business in this Commonwealth, a risk retention group shall submit to the department all of the following:
(1) A statement identifying the state or states in which the risk retention group is chartered and licensed as an insurance company to write liability insurance, the charter date, its principal place of business and such other information, including information on its membership, as the department may require to verify that the risk retention group is qualified under the definition of “risk retention group” in section 1502.1
(2) A copy of its plan of operations or a feasibility study and copies of all revisions of such plan or study submitted to the state in which the risk retention group is chartered and licensed, provided that the provision relating to the submission of a plan of operation or a feasibility study shall not apply with respect to any kind or classification of liability insurance which:
(i) was defined in the Product Liability Risk Retention Act of 1981 (Public Law 97-45, 95 Stat. 949 et seq.) before October 27, 1986; and
(ii) was offered before such date by any risk retention group which had been chartered and was operating for not less than three (3) years before such date.
(3) A copy of the most recent annual statement as described in subsection (d)(1).
(4)(i) A statement of registration for which a filing fee shall be imposed, which statement appoints the department as its agent for the purpose of receiving service of legal documents or process.
(ii) The appointment of the department shall be accompanied by written designation of the name and address of the officer, agent or other person to whom such process shall be forwarded by the department or its deputy on behalf of such risk retention group. In the event such designation is changed, a new certificate of designation shall be filed with the department within ten (10) days of such change.
(iii) Service of process upon a risk retention group pursuant to this paragraph shall be made by serving the department, or any deputy thereof or any salaried employe of the department whom the department designates for such purpose, with two copies thereof and the payment of a fee to be published by notice in the Pennsylvania Bulletin. The department shall forward a copy of such process by registered or certified mail to the risk retention group at the address given in its written certificate of designation and shall keep a record of all process so served upon it. Service of process so made shall be deemed made within the territorial jurisdiction of any court in this Commonwealth.
(c) The risk retention group shall submit a copy of any revision to its plan of operation or feasibility study required by section 1503(b)2 at the same time that such revision is submitted to the department of its chartering state.
(d) Any risk retention group doing business in this Commonwealth shall submit annually to the department on or before March 1 all of the following:
(1) A copy of the group's financial statement submitted to the state in which the risk retention group is chartered and licensed, which shall be certified by an independent public accountant and shall contain a statement of opinion on loss and loss adjustment expense reserves made by a member of the American Academy of Actuaries or a qualified loss reserve specialist.
(2) A copy of the most recent examination of the risk retention group as certified by the department or public official conducting the examination.
(3) Upon request by the department, a copy of any information or document pertaining to any outside audit performed with respect to the risk retention group.
(4) Such information as may be required to verify its continuing qualification as a risk retention group, as defined in section 1502.
(e) If a risk retention group is found to be in a hazardous financial condition by any court of competent jurisdiction, the risk retention group shall submit a copy of the court order to the department within ten (10) days of the date of the order.
(f) A risk retention group shall be liable for a fine of two hundred ($200) dollars per day of delinquency for either of the following:
(1) Failure to file the annual statement as provided by law on the first day of March, except that, for good cause shown, the department may grant, after written request, a reasonable extension of time within which such statement may be filed.
(2) Failure to submit to the department a copy of the order of a court of competent jurisdiction finding the risk retention group to be in a hazardous financial condition or financially impaired within ten (10) days of the date of such order.
(g)(1) Each risk retention group shall be liable for the payment of premium taxes and taxes on premiums of direct business for risks resident or located within this Commonwealth and shall report to the department the gross direct premiums, less returns thereon, written for risks resident or located within this Commonwealth. Such risk retention group shall be subject to taxation and any applicable fines and penalties related thereto on the same basis as a foreign admitted insurer, pursuant to section 902 of the act of March 4, 1971 (P.L. 6, No. 2), known as the “Tax Reform Code of 1971.”3
(2) To the extent that licensed agents, brokers or surplus lines agents with Pennsylvania licenses are utilized pursuant to section 1514,4 they shall report to the department the premiums for direct business for risks resident or located within this Commonwealth which such licensees have placed with or on behalf of a risk retention group not chartered and licensed in this Commonwealth.
(h) Any risk retention group and its agents and representatives shall comply with the act of July 22, 1974 (P.L. 589, No. 205), known as the “Unfair Insurance Practices Act,”5 insofar as its provisions apply to unfair claims practices and deceptive, false or fraudulent practices. However, if the department seeks an injunction regarding such conduct, the injunction must be obtained from a court of competent jurisdiction.
(i) Any risk retention group shall submit to an examination by the Insurance Department of the Commonwealth to determine its financial condition if the department of the jurisdiction in which the group is chartered and licensed has not initiated an examination or does not initiate an examination within sixty (60) days after a request by the Insurance Commissioner of the Commonwealth. Any such examination shall be coordinated with other jurisdictions to the extent feasible in order to avoid unjustified repetition and shall be conducted in an expeditious manner and in accordance with The National Association of Insurance Commissioners' Examination Handbook.
(j) The terms of any insurance policy issued by such risk retention group shall not provide or be construed to provide insurance policy coverage prohibited generally by state statute or declared unlawful by the highest court of the state whose law applies to such policy.
(k) A risk retention group doing business in this Commonwealth shall comply with a lawful order issued in a voluntary dissolution proceeding or in a delinquency proceeding commenced by a state insurance department if there has been a finding of hazardous financial condition or financial impairment after an examination under subsection (i).
(l) Any risk retention groups doing business in this Commonwealth prior to the enactment of this article shall, within thirty (30) days after the effective date of this article, comply with the provisions of this section.
(m) A risk retention group which violates any provision of this article shall be subject to fines and penalties applicable to admitted insurers generally, including revocation of its right to do business in this Commonwealth.

Credits

1921, May 17, P.L. 682, No. 284, art. XV, § 1504, added 1992, Dec. 18, P.L. 1519, No. 178, § 19, effective in 120 days.

Footnotes

1
40 P.S. § 991.1502.
2
40 P.S. § 991.1503(b).
3
72 P.S. § 7902.
4
40 P.S. § 991.1514.
5
40 P.S. § 1171.1 et seq.
40 P.S. § 991.1504, PA ST 40 P.S. § 991.1504
Current through Act 10 of the 2024 Regular Session. Some statute sections may be more current, see credits for details.
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